The Hidden Growth Barrier in Mid-Sized Businesses: When CEOs Become the Bottleneck
Recent research from the Scale Up Institute highlights that leadership capacity remains one of the key barriers to growth for UK scale-ups. This challenge is particularly acute in businesses transitioning from founder-led to professionally managed organisations.
The Bottleneck at the Top
You've built your business from the ground up. Your DNA is woven into the fabric of every decision, and you've surrounded yourself with brilliant people who share your vision. But here's the uncomfortable truth – you might be the very thing holding your business back.
In my experience, the tipping point typically comes when businesses hit the £5-15 million revenue mark. At this stage, the founding team's ability to maintain direct oversight of every decision becomes not just impossible, but actively harmful to growth.
This bottleneck manifests in patterns that will be painfully familiar to many CEOs:
· Your calendar is perpetually packed with decisions that shouldn't need your input.
· Your team seems hesitant to move forward without your blessing on even routine matters.
· You find yourself reviewing hiring decisions for mid-level positions.
· Your inbox is flooded with CCs from team members "keeping you in the loop."
When I started working with a mid-sized marketing agency, the CEO was spending 70% of their time on operational decisions that could have been handled by their leadership team. Within six months of implementing a new decision-making framework, that figure dropped to 20%, and their growth rate doubled.
The Head and Shoulders Dilemma
Think of your organisation like a body.
You, the founder, are the head. Your senior leadership team? They're the shoulders. When these shoulders aren't properly developed or empowered, everything must squeeze through to the top – creating what one FTSE 250 chairman describes as "a literal pain in the neck for everyone involved."
According to McKinsey's research on scaling businesses, companies where CEOs effectively delegate decision-making grow three times faster than those with centralized decision-making structures. Yet, 65% of UK mid-market CEOs report struggling to release control effectively.
The Real Cost of Being the Bottleneck
The impact of this bottleneck is well-documented. According to the Scale Up Institute's 2023 Annual Review, leadership capacity and delegation consistently rank among the top three barriers to growth for UK scale-ups. McKinsey's research on organisational effectiveness further highlights that companies with concentrated decision-making at the CEO level typically struggle with:
Significantly longer time-to-market on new initiatives
Higher turnover among senior team members
Disproportionate time spent on operational rather than strategic activities
Lower employee engagement and autonomy scores
These findings are reflected in my work with mid-market CEOs, where the inability to effectively delegate often creates a ceiling on growth that's difficult to break through.
More critically, the Scale Up Institute's 2023 Annual Review reveals that 75% of scale-up leaders identify access to leadership development and capacity building as vital to their continued growth. The same research shows that companies who invest in developing their leadership teams' decision-making capabilities are 42% more likely to maintain their high-growth trajectory. For businesses crossing the £10 million revenue threshold, the ability to delegate effectively emerges as a critical differentiator between those that continue to scale and those that plateau.
Why Your Current Leadership Team Might Not Get You to the Next Level
Here's a hard truth that emerged from interviews with 100 scale-up CEOs: The leadership team that got you to £5 million might not be the one to get you to £20 million. Not because they're not capable, but because they've been operating in your shadow.
Your team are operating well because they’ve morphed into your blueprint. They have learned to:
Seek your approval rather than trust their judgment
Avoid risk rather than manage it
Execute rather than strategise
React rather than initiate
But what got you here won’t get you there.
Take the example of a client of mine, Richard, the CEO of a ground transportation company that hit this exact inflection point in 2023. Rich found himself working 80-hour weeks, involved in every operational decision, when health issues forced him to confront an uncomfortable truth: his management style was unsustainable.
"I was becoming ill from the stress," he recalls. "Every decision, every client issue, every operational hiccup came to me. I knew something had to change."
We took a systematic approach to transforming his leadership team. He invested in developing his existing managers while identifying critical skills gaps. Two strategic hires later – a COO with experience in scaling logistics operations and a Commercial Director with M&A expertise – the business began to transform.
Within eight months, he had reduced his operational involvement by 70%. This freed him to focus on strategic growth, resulting in the successful acquisition of a complementary business in the Midlands that added £8 million in revenue and expanded their service capability. The company's growth rate doubled in the following year, with employee satisfaction scores increasing by 45%.
His advice “Don’t wait until life forces your hand to look at where you might be the biggest issue to your growth”
Breaking Free: The Path Forward
“The role of a scale-up CEO isn't to manage – it's to lead” as Tim, the CEO of a tech marketing company told me recently. Under his stewardship, the company has risen to £75m annual turnover.
For him, leadership means:
Setting the vision and strategic direction
Hire well and develop hard to build a truly capable leadership team
Creating an environment where decisions can be made without you
Developing your people to think strategically, not just execute tactically
Practical Next Steps
Another client, Katie, CEO of a fast-growing tech consultancy, approached this challenge. She implemented a simple but powerful decision matrix: green decisions (make them), amber decisions (consult me), red decisions (need my approval). Her leadership team mapped every decision type they encountered over two weeks, then collectively agreed on their categorisation. The result? Within three months, 85% of decisions were being made without her involvement, and the business's response time to client requests improved by 60%.
1. Audit Your Involvement
Start by tracking your decision-making patterns. One CEO found they were involved in 127 decisions in a single week – only 12 of which genuinely required their input.
2. Assess Your Team
Do they have the skills and experience to take on more responsibility? If not, what development do they need? Sometimes, you might need to make tough decisions about team composition.
3. Create Clear Frameworks
Give your team clear boundaries for decision-making. A client of mine used the information we gained from a communications workshop to understand the decision-making capabilities of his team, allowing clear pathways to be able to make faster, more efficient decisions as a team. He has final sign off on decisions over a certain cost, and those that impact strategy, but the day to day decisions are now well-made without him.
4. Accept Short-Term Pain for Long-Term Gain
Research shows that companies experiencing a temporary 5-10% dip in efficiency during leadership transition ultimately achieve 30-40% higher growth rates within 12 months.
The Breakthrough Moment
Your business's future growth depends on your ability to step back. Companies that successfully navigate this transition typically see:
40% increase in leadership team initiative
60% faster decision-making
35% improvement in talent retention
25% acceleration in revenue growth
The question isn't whether your team can handle more responsibility. The question is: Can you let them?
Previously posted in Work Happy, LinkedIn Newsletters